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The Environmental Impacts of Electricity Restructuring: Looking Back and Looking Forward AgEcon
Palmer, Karen L.; Burtraw, Dallas.
In the mid-1990s, when the Federal Energy Regulatory Commission was preparing to release Order 888 requiring open access to the transmission grid, the commission, environmental groups, and the Environmental Protection Agency, among others, raised the question of how open access and greater competition in wholesale electricity markets might affect the environment. If open access worked as expected, underutilized older coal-fired generators in the Midwest and elsewhere might find new markets for their power, leading to associated increases in air pollution emissions. Restructuring also might lead to retirements of inefficient nuclear facilities, whose generation would be replaced by fossil generation, further increasing emissions. On the other hand, some...
Tipo: Working or Discussion Paper Palavras-chave: Electricity; Electric utilities; Regulation; Competition; Environment; Air pollution; Natural gas; Coal; Nuclear; Renewables; Customer choice; Resource /Energy Economics and Policy; L51; L94; L98.
Ano: 2005 URL: http://purl.umn.edu/10656
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CO2 Allowance Allocation in the Regional Greenhouse Gas Initiative and the Effect on Electricity Investors AgEcon
Burtraw, Dallas; Kahn, Danny; Palmer, Karen L..
The Regional Greenhouse Gas Initiative (RGGI) is an effort by nine Northeast and Mid-Atlantic states to develop a regional, mandatory, market-based cap-and-trade program to reduce greenhouse gas (GHG) emissions from the electricity sector. The initiative is expected to lead to an increase in the price of electricity in the RGGI region and beyond. The implications of these changes for the value of electricity-generating assets and the market value of the firms that own them depends on the initial allocation of carbon dioxide allowances, the composition of generating assets owned by the firm, and the locations of those assets. Changes in asset values inside the RGGI region may be positive or negative, whereas changes outside of the RGGI region are almost...
Tipo: Working or Discussion Paper Palavras-chave: Emissions trading; Allowance allocations; Electricity; Air pollution; Auction; Grandfathering; Generation-performance standard; Output-based allocation; Cost-effectiveness; Greenhouse gases; Climate change; Global warming; Carbon dioxide; Asset value; Environmental Economics and Policy; Q2; Q25; Q4; L94.
Ano: 2005 URL: http://purl.umn.edu/10495
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The Effect on Asset Values of the Allocation of Carbon Dioxide Emission Allowances AgEcon
Burtraw, Dallas; Palmer, Karen L.; Bharvirkar, Ranjit; Paul, Anthony.
Paradoxically, owners of existing generation assets may be better off paying for carbon dioxide emission allowances than having them distributed for free. This analysis shows that it takes just 7.5% of the revenue raised under an auction to preserve the asset values of existing generators.
Tipo: Working or Discussion Paper Palavras-chave: Carbon dioxide; Emission allowance trading; Allocation; Electricity; Restructuring; Air pollution; Auction; Grandfathering; Generation performance standard; Outputbased allocation; Cost-effectiveness; Environmental Economics and Policy; Q2; Q25; Q4; L94.
Ano: 2002 URL: http://purl.umn.edu/10705
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'Second-Best' Adjustments to Externality Estimates in Electricity Planning with Competition AgEcon
Burtraw, Dallas; Palmer, Karen L.; Krupnick, Alan J..
A number of state public utility commissions are using "social costing" methods to consider externalities in electricity resource planning. The most comprehensive and formal method is the use of monetary place-holders in the financial evaluation of new investments and potentially in system dispatch to reflect quantitative estimates of externality values. This approach necessarily must take existing environmental and social regulation as given. Furthermore, regulated utilities face increasing competition from electricity generators outside their service territory who may not be affected by social costing. The lack of universal and uniform social costing places PUC actions soundly in the realm of "second-best policy" and they may have unintended consequences...
Tipo: Working or Discussion Paper Palavras-chave: Second-best; Environmental regulation; Electricity regulation; Environmental adders; Environmental Economics and Policy; Q25; Q48; L51.
Ano: 1995 URL: http://purl.umn.edu/10753
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Efficient Emission Fees in the U.S. Electricity Sector AgEcon
Banzhaf, H. Spencer; Burtraw, Dallas; Palmer, Karen L..
This paper provides new estimates of efficient emission fees for sulfur dioxide (SO2) and nitrogen oxides (NOX) emissions in the U.S. electricity sector. The estimates are obtained by coupling a detailed simulation model of the U.S. electricity markets with an integrated assessment model that links changes in emissions with atmospheric transport, environmental endpoints, and valuation of impacts. Efficient fees are found by comparing incremental benefits with emission fee levels. National quantity caps that are equivalent to these fees also are computed, and found to approximate caps under consideration in the current multi-pollutant debate in the U.S. Congress and the recent proposals from the Bush administration for the electricity industry. We also...
Tipo: Working or Discussion Paper Palavras-chave: Emissions trading; Emission fees; Air pollution; Cost-benefit analysis; Electricity; Particulates; Nitrogen oxides; NOx; Sulfur dioxide; SO2; Health benefits; Environmental Economics and Policy; Q2; Q4; D61.
Ano: 2002 URL: http://purl.umn.edu/10505
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Ancillary Benefits of Reduced Air Pollution in the United States from Moderate Greenhouse Gas Mitigation Policies in the Electricity Sector AgEcon
Burtraw, Dallas; Krupnick, Alan J.; Palmer, Karen L.; Paul, Anthony; Toman, Michael; Bloyd, Cary.
This paper considers how moderate actions to slow atmospheric accumulation of greenhouse gases from fossil fuel use also could reduce conventional air pollutants in the United States. The benefits that result would be "ancillary" to greenhouse gas abatement. Moreover, the benefits would tend to accrue locally and in the near term, while benefits from reduced climate change mostly accrue globally and over a time frame of several decades or longer. The previous literature suggests that changes in nitrogen oxides (NOx) would be the most important consequence of moderate carbon policies. We calculate these changes in a detailed electricity model linked to an integrated assessment framework to value changes in human health. A tax of $25 per metric ton of carbon...
Tipo: Conference Paper or Presentation Palavras-chave: Climate change; Greenhouse gas; Ancillary benefits; Air pollution; Co-control benefits; Nitrogen oxides; Sulfur dioxide; Carbon dioxide; Particulates; Health; Environmental Economics and Policy; H23; I18; Q48.
Ano: 2001 URL: http://purl.umn.edu/10664
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Economics of Pollution Trading for SO2 and NOx AgEcon
Burtraw, Dallas; Evans, David A.; Krupnick, Alan J.; Palmer, Karen L.; Toth, Russell.
For years economists have urged policymakers to use market-based approaches such as cap-and-trade programs or emission taxes to control pollution. The SO2 allowance market created by Title IV of the 1990 U.S. Clean Air Act Amendments represents the first real test of the wisdom of economists' advice. Subsequent urban and regional applications of NOx emission allowance trading took shape in the 1990s in the United States, culminating in a second large experiment in emission trading in the eastern United States that began in 2003. This paper provides an overview of the economic rationale for emission trading and a description of the major U.S. programs for sulfur dioxide (SO2) and nitrogen oxides (NOx). We evaluate these programs along measures of...
Tipo: Working or Discussion Paper Palavras-chave: Sulfur dioxide; Nitrogen oxides; Emission trading; Power plants; Air pollution; Environmental Economics and Policy; H23; Q25; Q28; D78.
Ano: 2005 URL: http://purl.umn.edu/10488
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Electricity Restructuring and Regional Air Pollution AgEcon
Palmer, Karen L.; Burtraw, Dallas.
This paper investigates the regional air pollution effects that could result from new opportunities for inter-regional power transmission in the wake of more competitive electricity markets. The regional focus is important because of great regional variation in the vintage, efficiency and plant utilization rates of existing generating capacity, as well as differences in emission rates, cost of generation and electricity price. Increased competition in generation could open the door to changes in the regional profile of generation and emissions. We characterize the key determinant of changes in electricity generation and transmission as the relative cost of electricity among neighboring regions. In general, low cost regions are expected to export power...
Tipo: Working or Discussion Paper Palavras-chave: Air pollution; Electricity restructuring; Transmission; Environmental Economics and Policy; L94; Q25; Q28.
Ano: 1996 URL: http://purl.umn.edu/10766
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State-Level Policies and Regulatory Guidance for Compliance in the Early Years of the SO2 Emission Allowance Trading Program AgEcon
Lile, Ronald D.; Burtraw, Dallas.
The Clean Air Act Amendments (CAAA) of 1990 instituted a historic experiment in emission allowance trading for sulfur dioxide (SO2). A necessary requirement for evaluating this experiment is an understanding of how the cost recovery rules and other guidance given to firms by state-level public utility commissions (PUCs) and elected bodies has affected compliance behavior. From the onset of the CAAA, there has been varied response by state policy-makers toward SO2 compliance. This paper presents a compilation of these actions as they took shape in states that were affected by the SO2 program. Our primary interest is on the proposals that emerged during the embryonic years of the allowance program, from 1990 to 1993, when investment plans for utilities...
Tipo: Working or Discussion Paper Palavras-chave: Clean Air Act Amendments; Sulfur dioxide; Allowance trading; Regulation; Electricity; Public utility commissions; Environmental Economics and Policy; H43; Q2; Q4.
Ano: 1998 URL: http://purl.umn.edu/10828
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SO2 Allowance Trading: How Experience and Expectations Measure Up AgEcon
Bohi, Douglas R.; Burtraw, Dallas.
The SO2 trading program has achieved reductions in emissions ahead of schedule, with allowance prices below the marginal costs that were anticipated for the program. This paper explores the experience with the program and proposes a taxonomy of reasons why allowance prices are low. The overarching reason is that the most costly investments to accommodate full emission reductions have been successfully delayed. Application of a discount rate to these long run marginal costs yields an estimate of allowance price close to that observed today. Several factors have contributed to the delay in bearing these costs, and helped to reduce their magnitude. One group of factors stems from market fundamentals, especially the cost of rail transport of low sulfur coal. A...
Tipo: Working or Discussion Paper Palavras-chave: Environmental Economics and Policy.
Ano: 1997 URL: http://purl.umn.edu/10878
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Allocation of CO2 Emissions Allowances in the Regional Greenhouse Gas Cap-and-Trade Program AgEcon
Burtraw, Dallas; Palmer, Karen L.; Kahn, Danny.
Cap-and-trade programs for air emissions have become the widely accepted, preferred approach to cost-effective pollution reduction. One of the important design questions in a trading program is how to initially distribute the emissions allowances. Under the Acid Rain program created by Title IV of the Clean Air Act, most emissions allowances were distributed to current emitters on the basis of a historic measure of electricity generation in an approach known as grandfathering. Recent proposals have suggested two alternative approaches: allocation according to a formula that is updated over time according to some performance metric in a recent year (the share of electricity generation or something else) and auctioning allowances to the highest bidders....
Tipo: Working or Discussion Paper Palavras-chave: Emissions trading; Allowance allocations; Electricity; Air pollution; Auction; Grandfathering; Generation performance standard; Output-based allocation; Cost-effectiveness; Greenhouse gases; Climate change; Global warming; Carbon dioxide; Sulfur dioxide; Nitrogen oxides; Mercury; Environmental Economics and Policy; Q2; Q25; Q4; L94.
Ano: 2005 URL: http://purl.umn.edu/10650
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Cost Savings Sans Allowance Trades? Evaluating the SO2 Emission Trading Program to Date AgEcon
Burtraw, Dallas.
Title IV of the 1990 amendments to the Clean Air Act initiated a historic experiment in incentive-based environmental regulation through the use of tradable allowances for emission of sulfur dioxide by electric generating facilities. To date, relatively little allowance trading has taken place; however, the costs of compliance have been much less than anticipated. The purpose of this paper is to address the apparent paradox that the allowance trading program may not require (very much) trading to be successful. Title IV represented two great steps forward in environmental regulation: first a move toward performance standards and second formal allowance trading. The first step has been sufficient to date for improving dynamic efficiency and achieving...
Tipo: Working or Discussion Paper Palavras-chave: Emission trading; SO2; Clean Air Act; Cost-effectiveness; Incentive-based regulation; Environmental Economics and Policy; Q25; Q28; Q48; L51.
Ano: 1996 URL: http://purl.umn.edu/10682
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The Benefits of Reduced Air Pollutants in the U.S. from Greenhouse Gas Mitigation Policies AgEcon
Burtraw, Dallas; Toman, Michael.
Policies that reduce emissions of greenhouse gases can simultaneously alter emissions of conventional pollutants that have deleterious effects on human health and the environment. This paper first describes how these "ancillary" benefits--benefits in addition to reduced risks of climate change--can result from greenhouse gas (GHG) mitigation efforts. It then discusses methodologies for assessing ancillary benefits and provides a critical review of estimates associated with reductions of criteria air pollutants. We find that these benefits in the U.S. may be significant, indicating a higher level of "no regrets" greenhouse gas abatement than might be expected based on simple economic calculations of abatement cost. However, the magnitude of ancillary...
Tipo: Working or Discussion Paper Palavras-chave: Climate change; Greenhouse gas; Ancillary benefits; Air pollution; Co-control benefits; Environmental Economics and Policy; H23; I18; Q48.
Ano: 1997 URL: http://purl.umn.edu/10496
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The Benefits of Air Pollutant Emissions Reductions in Maryland: Results from the Maryland Externalities Screening and Valuation Model AgEcon
Austin, David H.; Krupnick, Alan J.; Burtraw, Dallas; Stoessell, Terrell.
This paper reports the results of policy simulations of environmental and human health externalities arising from the production of electricity. The primary purpose of this paper is to illustrate the Maryland Externalities Screening and Valuation Model, developed for the State of Maryland's Department of Natural Resources. A secondary purpose is to estimate likely Maryland benefits from Title IV emissions reductions at electric power generation facilities. Sources and scope of benefits, and the potential of policy to achieve specific environmental and human health goals, are suggested by the results. We find that expected health benefits from reductions in power plant emissions dominate the estimated benefits of improved recreational visibility and...
Tipo: Working or Discussion Paper Palavras-chave: Integrated assessment; Health and environmental benefits; Valuation; Uncertainty; Environmental Economics and Policy; I81; Q24; Q25; Q26; Q49.
Ano: 1998 URL: http://purl.umn.edu/10825
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Cost Savings, Market Performance, and Economic Benefits of the U.S. Acid Rain Program AgEcon
Burtraw, Dallas.
This paper reports on four areas of research concerning Title IV of the 1990 Clean Air Act Amendments that regulates emissions of SO2 from electricity generation. The first is the costs of the program over the long-run as estimated from the current perspective taking into account recent changes in fuel markets and technology. We compare projected costs with potential cost savings that can be attributable to formal trading of emission allowances. The second area is an evaluation of how well allowance trading has worked to date. The third area is the relationship between compliance costs and economic costs from a general equilibrium perspective. The fourth area is a comparison of benefits and costs for the program.
Tipo: Working or Discussion Paper Palavras-chave: Acid rain; Benefit-cost analysis; Air pollution; Permit trading; Clean Air Act; Environmental Economics and Policy; H43; Q2; Q4.
Ano: 1998 URL: http://purl.umn.edu/10885
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The Ten-Year Rule: Allocation of Emission Allowances in the EU Emission Trading System AgEcon
Ahman, Markus; Burtraw, Dallas; Kruger, Joseph; Zetterberg, Lars.
In its guidance on National Allocation Plans (NAPs), the European Commission has discouraged Member States from adopting allocation methodologies that would provide incentives to firms affecting their compliance behavior. The purpose is to promote economic efficiency and to prevent strategic behavior that deviates from individual and collective cost-minimization. For example, some methodologies would reward one type of compliance investment over another. To discourage such actions, the EU Emission Trading System guidelines prohibit ex post redistribution of emission allowances within an allocation period based on behavior in that period. Similarly, the Commission has indicated that decisions about the initial distribution of allowances in the second phase...
Tipo: Working or Discussion Paper Palavras-chave: Emission trading; Allowance allocations; Closures; New entrants; Tradable permits; Air pollution; Cost-effectiveness; Greenhouse gases; Climate change; Global warming; Carbon dioxide; Environmental Economics and Policy; Q2; Q25; Q4; L94.
Ano: 2005 URL: http://purl.umn.edu/10637
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An Assessment of the EPA's SO2 Emission Allowance Tracking System AgEcon
Lile, Ronald D.; Bohi, Douglas R.; Burtraw, Dallas.
On November 8, 1996, various Environmental Protection Agency (EPA) officials, scholars and industry representatives gathered at Resources for the Future (RFF) to examine the EPA's method for classifying private SO2 allowance transactions by the Allowance Tracking System (ATS). The one-day workshop at RFF was designed to evaluate how well the EPA's classification scheme within the ATS currently meets the needs of constituencies with a vested interest in the allowance trading system, and to determine if other classifications would be more beneficial. The EPA has limited its collection of information to that which is necessary to ensure compliance with environmental goals. In particular, the EPA has interpreted its mission to be one of minimal interference in...
Tipo: Working or Discussion Paper Palavras-chave: Transaction costs; Regulated industries; Electric utilities; Emissions; Environmental Economics and Policy; D23; D49; H70; K23; L94; Q25.
Ano: 1996 URL: http://purl.umn.edu/10890
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Cost-Effectiveness of Renewable Electricity Policies AgEcon
Palmer, Karen L.; Burtraw, Dallas.
We analyze policies to promote renewable sources of electricity. A renewable portfolio standard raises electricity prices and primarily reduces gas-fired generation. A "knee" of the cost curve exists between 15% and 20% goals for 2020 in our central case, and higher natural gas prices lower the cost of greater reliance on renewables. A renewable energy production tax credit lowers electricity price at the expense of taxpayers and thus limits its effectiveness in reducing carbon emissions; it also is less cost-effective at increasing renewables than a portfolio standard. Neither policy is as cost-effective as a cap-and-trade policy for achieving carbon emissions reductions.
Tipo: Working or Discussion Paper Palavras-chave: Renewable energy; Electricity; Renewable portfolio standard; Carbon dioxide; Resource /Energy Economics and Policy; Q42; Q48; Q54.
Ano: 2005 URL: http://purl.umn.edu/10845
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The Costs and Benefits of Reducing Acid Rain AgEcon
Burtraw, Dallas; Krupnick, Alan J.; Mansur, Erin T.; Austin, David H.; Farrell, Deirdre.
Title IV of the 1990 Clean Air Act Amendments initiated a dramatic reduction in emissions of sulfur dioxide and nitrogen oxides by electric power plants. This paper presents the results of an integrated assessment of the benefits and costs of the program, using the Tracking and Analysis Framework (TAF) developed for the National Acid Precipitation Assessment Program (NAPAP). Although dramatic uncertainties characterize our estimates especially with respect to the benefits of the program, many of which we have modeled explicitly, we find that the benefits can be expected to substantially outweigh the costs of the emission reductions. The lion's share of benefits result from reduced risk of premature mortality, especially through reduced exposure to...
Tipo: Working or Discussion Paper Palavras-chave: Acid rain; Sulfur dioxide; Nitrogen oxides; Cost-benefit analysis; Clean Air Act; Title IV; Environmental Economics and Policy; H43; Q2; Q4.
Ano: 1997 URL: http://purl.umn.edu/10692
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The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting AgEcon
Goulder, Lawrence H.; Parry, Ian W.H.; Williams, Roberton C., III; Burtraw, Dallas.
This paper employs analytical and numerical general equilibrium models to examine the costs of achieving pollution reductions under a range of environmental policy instruments in a second-best setting with pre-existing factor taxes. We compare the costs and overall efficiency impacts of emissions taxes, emissions quotas, fuels taxes, performance standards, and mandated technologies, and explore how costs change with the magnitude of pre-existing taxes and the extent of pollution abatement. We find that the presence of distortionary taxes raises the costs of pollution abatement under each instrument relative to its costs in a first-best world. This extra cost is an increasing function of the magnitude of pre-existing tax rates. For plausible values of...
Tipo: Working or Discussion Paper Palavras-chave: General equilibrium efficiency analysis; Environmental instrument choice; Second-best regulation; Environmental Economics and Policy; D58; H21; L51.
Ano: 1998 URL: http://purl.umn.edu/10522
Registros recuperados: 42
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